

Portsmouth manager Harry Redknapp, former Portsmouth chairman Milan Mandaric and Portsmouth chief executive Peter Storrie were also held.

All five men were arrested on suspicion of conspiracy to defraud and false accounting. Faye was arrested at his home in Glasgow.

Police today said all five men had been released on bail until February.

The arrests came after police searched 12 addresses around the country in a series of raids.

A spokesman for Portsmouth FC said police were investigating a matter dating back to 2003 - the year Faye, now 30, joined the club from French side Auxerre in a £1.5million deal.

Mandaric, now in charge at Leicester City, was Portsmouth chairman at the time. Redknapp, who has been linked with the vacant England job, was manager at Fratton Park and Storrie was chief executive.

In 2005, Faye moved to Newcastle for £2million. McKay set up the deal.

The Senegal international later signed for Charlton but is now on a season-long loan at Ibrox.

The inquiry by the economic crime unit of City of London Police follows a massive investigation into football transfers by former Metropolitan Police commissioner Lord Stevens.

Stevens and his team were hired by the English FA and looked into 362 transfer deals made over 15 months.

In his final report in June, Stevens highlighted concerns over 17 transfers and five English Premiership clubs.

City of London Police are now investigating allegations of corruption in football and its impact on club owners and shareholders.

In July, the cops searched club offices at Rangers, Portsmouth and Newcastle as part of the inquiry that led to yesterday's arrests.

A 61-year-old man was held in May on suspicion of money-laundering.

And in September, a 28-year-old man, widely believed to be Spurs fullback Pascal Chimbonda, was detained by the inquiry team. His bail has been extended to January.

Chimbonda was interviewed as a witness and there is no suggestion that he was involved in anything illegal.

There is also no suggestion of wrongdoing by Rangers.

The club confirmed a player had been arrested but did not comment further.

Portsmouth said Redknapp and Storrie had been asked to help police with their inquiries.

A spokesman added: "The club is fully supportive of Peter and Harry, who are co-operating fully."

Last night, the City of London force said four men, aged 48, 55, 60 and 69, had been released on police bail.

Redknapp was last night driven away from a police station in Chichester.

Later, at home in Poole, Dorset, he said: "We all helped the police with their inquiries but it doesn't directly concern me. It's other people involved.

"They have to arrest you to talk to you, for you to be in the police station."

His football pundit son Jamie and Jamie's former pop star wife Louise were at home with him.

In 2006, during his second spell at Portsmouth, the BBC's Panorama secretly filmed Redknapp discussing an allegedly illicit approach to buy Andy Todd, then with Blackburn Rovers.

He issued a strong denial and Stevens cleared him of serious wrongdoing.

Faye has only played three times for Rangers, twice in the league and once in the CIS Cup. He has been capped 21 times for Senegal.